Why I think Bitcoin will not become an national currency

[allthingsluxury]

I really dont think the community as a whole wants it to be tied to any one nation.

[DannyHamilton]

I really dont think the community as a whole wants it to be tied to any one nation.

I'm not sure why anybody in the bitcoin community would be upset at one or more nations choosing to adopt bitcoin as a national currency?

[FreeMoney]

When countries start using it out of necessity of foresight it still won't be a national currency, just like it isn't a drug or gambling or sock currency.

[grondilu]

When countries start using it out of necessity of foresight it still won't be a national currency, just like it isn't a drug or gambling or sock currency.

Being a national currency does not mean that the currency belongs to a nation.  It just means that this nation officially uses this currency.

Same as the english language is the official language in Great-Britain, and yet english is not only used by british people.

[kjj]

In practice, nations maintain national currencies primarily so that they can inflate their debts away, and secondarily so that their bankers can "tweak" the money supply to suit their imagined needs.

They rarely give up that power willingly.  A bunch of nations did that not too long ago because they were convinced that switching to the Euro would have benefits in excess of the price they were paying.  Their project does not appear to be working out the way they hoped it would.

Eventually though, bitcoin, or something very much like bitcoin, will rise up.  People will use bitcoin despite the special legal protections that governments grant to their own currencies, and governments will lose their powers of inflation and meddling, either by choice, or by starvation.

If I were a betting man, I'd bet that bitcoin (or something) will become the world's currency before it becomes any government's currency.  It is a very interesting time to be alive.

[FreeMoney]

Bitcoin will be the de facto decentralized currency. Bitcoin's value will rise over time, but I don't think BTC will be an national currency. Why?

Half of the 22 mil coins have being distributed, to something like 0.001% of the population? That's just not going to work. People who do not own BTC will not want to get on board for it to be an official currency as it means their wealth will decrease.

What did distribution look like 1, 2, and 3 years ago? Where is it clearly heading?

[FreeMoney]

When countries start using it out of necessity of foresight it still won't be a national currency, just like it isn't a drug or gambling or sock currency.

Being a national currency does not mean that the currency belongs to a nation.  It just means that this nation officially uses this currency.

Same as the english language is the official language in Great-Britain, and yet english is not only used by british people.

Fair enough. I was meaning to reply to:

I really dont think the community as a whole wants it to be tied to any one nation.

Even when bitcoin is a national currency in the sense that you describe it won't be tied to that nation and more than it is tied to me because I use it.

[psybits]

Well, it is legal to start your own nation in many parts of the world.

Would be a fun experiment to make the national currency of it Bitcoin   

*Mind goes into overdrive....* 

[FreeMoney]

3) Money isn't wealth, money is an accounting system.

I think this is an important point and it is often forgotten. The fact that a small number of people own all the bitcoins doesn't mean that everyone else has nothing. If I own a house that is worth BTC10,000 but I own no bitcoins, my wealth is BTC10,000, not 0. There are about 3 trillion dollars in existence, but the total net wealth of Americans far exceeds that value (it was more than $50 trillion in 2009).

Money is a great accounting system for anything that is small compared to the scope of the system, but it is meaningless (or close) for measuring the whole system or a large part.

[deeplink]

Well, it is legal to start your own nation in many parts of the world.

I'd like to know where?

[psybits]

Well, it is legal to start your own nation in many parts of the world.

I'd like to know where?

I think pretty much anywhere.. No one will tell you that though!

http://www.britannica.com/blogs/2009/04/diy-nation-how-to-start-your-own-country-three-experts-offer-advice/

http://www.foreignpolicy.com/articles/2008/02/25/how_to_start_your_own_country_in_four_easy_steps

There was that abandoned WWII fort near UK Sealand that was basically it's own country as it was in internatonal waters.

I think artificial island is the best way 

Who wants to found a BTC nation with me 

[Realpra]

I don't think that bitcoin and nations go well together in the first place.

Perhaps not most current nations, but I think for the people a Bitcoin nation would be strong.

I also agree with DeathAndTaxes that Bitcoin will benefit the poor and protect what savings they have. I have always held the view that Bitcoin will help even the last adopter.

[Impaler]

No nation would ever adopt such a massively deflationary currency as BTC for the simple reason that it would bring economic RUIN.

[deeplink]

No nation would ever adopt such a massively deflationary currency as BTC for the simple reason that it would bring economic RUIN.

Economic ruin like EUR or like USD ?

[Luno]

The point of Bitcoin was for it to become the peoples currency, nations are imaginatory. If you want wide adoptation where you can use Bitcoin almost anywhere, discuss that.

If a nation were to adopt Bitcoin as an official currency, what would the benefit be? This was tried in the Antique; collect taxes in a deflatory currency, outlaw interest = all monetary wealth end up in the hands of a handfull of people the 0.05%, the rest of the people used barter!

[jayson3]

1) Bitcoin depends on an efficient. open, and functional internet to exist. 

2) Governments never give up power voluntarily

3) in the case of widespread revolution or government collapse. #1 is very questionable.  Physical silver is better.

4) If governments stay in control, and bitcoin grows too powerful, they will either destroy it or usurp it.

The best we can hope is that bitcoin can act as a check on government power over our money, making draconian controls impractical because of the bitcon alternative (much as gold/silver have done traditionally).

Bitcoin competition could also force credit cards / banks to offer more competitive services that are lower cost, more private, and less subject to fraud.

[wormbog]

What nation would want to use bitcoin as a national currency? The government wouldn't be able to control it. Deficit spending would be impossible. Good for the people, but bad for the people in charge.

In a future scenario where bitcoin is widely known, it will be thought of as a store of currency, like an alternative to keeping money in a savings account. Want to buy something? Convert some BTC to your national currency, make the purchase. The seller will take your currency and convert it back to bitcoin. Just got your paycheck? Keep a little in cash for pocket money, convert the rest to bitcoin.

At some point a nation will audit a merchant and discover that a significant amount of sales are happening in bitcoin, but the merchant's sales records cannot be verified because there's no bank involved. That will bring it to the attention of the gov't as a threat to tax revenue.

What happens next will determine whether bitcoin emerges as a legitimate international currency or is banished to the black market forever.

[FreeMoney]

What nation would want to use bitcoin as a national currency? The government wouldn't be able to control it. Deficit spending would be impossible. Good for the people, but bad for the people in charge.

Plenty of governments use currencies that they don't control. They do it because the currencies work much better than what they can manage themselves.

[jayson3]

1995 article by economist Marry Rot hard about the nature of money.  He talks about how gold can be used to eliminate the Fed. Easy to see how bitcoins could server the same purpose.

[url]http://mises.org/daily/2882[url]

[xxjs]

1995 article by economist Marry Rot hard about the nature of money.  He talks about how gold can be used to eliminate the Fed. Easy to see how bitcoins could server the same purpose.

[url]http://mises.org/daily/2882[url]

Murray N. Rothbard

You him no like?